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Poker
Joined: 16 Jan 2010
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 Posted: Thu Sep 13, 2012 11:16 pm Post subject: QE3 announced.. what will this do to the Korean Won?? |
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US Fed chairman, Ben Bernanke has announced an open ended QE of 40 billion dollars per month.
http://www.guardian.co.uk/business/2012/sep/13/fed-bond-buying-stimulus-growth?intcmp=239
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Federal Reserve chairman Ben Bernanke pledged to keep injecting money into the US economy until it recovers Thursday as it announced a rolling program to buy $40bn a month in mortgage-backed securities.
The widely anticipated third round of quantitative easing � dubbed QE3 � comes after Fed chairman Ben Bernanke had said he was increasingly concerned about the recovery.
Bernanke said the plan was aimed at reviving the jobs market by stimulating the still troubled housing market. "This is a Main Street policy because what we're about here are jobs," he said at a press conference.
He said the Fed stood ready to take more action if the situation deteriorated further and that the he would not "rush to tighten policy" even when signs of a stronger recovery emerge.
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Not a good time to save in US dollars. Will we see the Won shoot to 1000 in the long run? |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Fri Sep 14, 2012 5:26 am Post subject: |
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| It will make the Won stronger. Anything that strengthens the American economy will bring support to the Won also because of the increased trade from people buying Korean products. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Sep 14, 2012 7:26 am Post subject: |
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| young_clinton wrote: |
| It will make the Won stronger. Anything that strengthens the American economy will bring support to the Won also because of the increased trade from people buying Korean products. |
While your answer is right, your explanation is wrong: you're assuming QE3 will strengthen the economy. Time will tell.
No, the won will become stronger simply because QE3 will be another infusion of USD, and the greater the supply of USD, the less value it has.
So not only will the won strengthen, but other currencies will too. |
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jaykimf
Joined: 24 Apr 2004
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Fri Sep 14, 2012 9:09 am Post subject: |
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yes. Sorry, I forgot to add that caveat. That is with the assumption nothing else were to change. |
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chellovek
Joined: 29 Feb 2008
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| Posted: Fri Sep 14, 2012 6:32 pm Post subject: |
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Good use of the lingo, son. They've taught you well. |
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